By JOYCE HOOI

EMPLOYEES have been given hope that whatever happened in 2009, stays in 2009. As companies emerge from the debris of the financial crisis and find most appendages miraculously intact, the frantic cost-cutting measures that have marred 2009 might be reversed or halted in 2010.

Some 46 per cent of companies are planning to reverse belt-tightening measures like travel reductions and restrictions in travel policy, while 42 per cent are ready to reverse wage freezes next year - according to a poll of 40 companies at Watson Wyatt's 2009 Annual Human Capital Conference yesterday.

In the same poll, respondents had, on average, revised their overall salary increase budgets for 2010 from 2.5 per cent in July to 3.2 per cent currently.

These figures lend more confirmation to Watson Wyatt's HR Trends survey conducted earlier this month, which found that firms' salary-increase budgets for 2010 are set to be higher than this year's dismal figures. After taking into account salary freezes, the average salary increase in 2009 stood at 1.3 per cent; next year, it is estimated to be 3.3 per cent.

Robert Walters' manager of its human resources specialist recruitment division, Joanne Chua, also sees salary increases looking better in 2010. 'The increases will not be as good as in 2006 and 2007, but definitely better than figures from the first half of 2009 - which were unmentionable,' she said.

An upturn in pay prospects will be a timely one, in view of earlier Watson Wyatt surveys demonstrating that cost-cutting actions have adversely affected employees' work attitude this year.

This decline in employee engagement has been particularly acute in Singapore and Hong Kong, especially among top-performing employees.

'There are two hypotheses for this: firstly, Singapore and Hong Kong have extremely open economies and their workers feel the effects of an economic crisis much faster,' said Jon Randall, Watson Wyatt's head of human capital group for Asean countries. 'Secondly, there have been rising expectations from the workforce.'

Companies like DHL Express have been bracing themselves for the inevitable upheaval that lean times and subsequent recovery breed, according to Boyd Williams - DHL Express's senior vice-president of human resources for Asia Pacific, Eastern Europe, Middle East and Africa - who spoke at the Watson Wyatt conference yesterday. 'While a fall in employee engagement is not yet detectable, we expect a decline in overall engagement as people have been expected to do more with less,' said Mr Williams.

While Mr Williams' company has measures in place to combat the likelihood of top performers defecting to other firms, other companies cannot claim the same.

On Tuesday, 70 RBS Coutts employees in the Singapore office resigned en masse, a few months after the wealth manager lost its co-chief executive, Hanspeter Brunner, and South Asia unit head, Raj Sriram.

The exodus was related to the unit's deferral of bonuses.

'Companies that take drastic actions without explanation might experience a low attrition rate during the recession, but once the economy recovers, employees will be more likely to consider other places of employment,' warned Mr Randall.

In fact, market sentiment might have improved enough for the yearly game of corporate musical chairs to start up. 'People might look for other opportunities after they receive their bonuses at the end of 2009 or start of 2010,' said Robert Walters' Ms Chua.

Despite the general upbeat tone in the salary-increase sphere, the industry that employees are in will come into play as well.

Pharmaceutical firms that had a higher-than-average pay raise this year have scaled down their projections for next year, according to Watson Wyatt's research. Manufacturing employees, however, might see an uptick in next year's increases to make up for a nightmarish 2009.

While it might pay more to be in certain industries next year, it certainly will not pay to be Bank of America's Ken Lewis, who has agreed to forgo both his salary and bonus as the beleaguered bank's chief executive.

This article was first published in The Business Times.